Euro Adoption - Fears of property prices spike as new funds surface
Very interesting article on the Business Times 11th. May 2006 by Massimo Farrugia entitled as above. The first few articles are below:
"A surge of undeclared funds that would surface as Malta adopts the euro is likely to be laundered into the property market or leave the country, Vince Farrugia, director general of the GRTU - the Chamber of Small and Medium Enterprises has warned.
There could be a spike in property prices as banknotes hidden beneath mattresses saw the light of day in the run up to euro day, he said."
The easiest way will be for people to invest their cash in property so that they may get their return in euros. Since Malta has a record amount of cash in circulation per capita, this will create an artificial demand for property, pushing up prices and making it even more prohibitive for business start-ups and those enterprises wanting to expand their premises to buy property," he said.
He said schemes encouraging undeclared money to come upstream would limit speculation and prevent it from leaving the country......"
Read the rest of the article here.